County approves railroad growth

Tuesday

Nov 6, 2012 at 12:01 AM

Union Pacific Railroad's $238 million plan to nearly triple the capacity of its intermodal facility outside Lathrop over the next 10 years received environmental clearance last week from San Joaquin County planning officials.

Reed Fujii

Union Pacific Railroad's $238 million plan to nearly triple the capacity of its intermodal facility outside Lathrop over the next 10 years received environmental clearance last week from San Joaquin County planning officials.

The Planning Commission unanimously approved an environmental impact report and use permit that would see the intermodal facility - where shipping containers and truck trailers are loaded and unloaded from railcars - more than double in size to 286 acres and handle as many as 730,000 container transfers per year.

That approval came Thursday over the objections of Lathrop city officials, who said while they support the expansion in principal that county planners significantly underestimated the cost and the city's share of needed improvements to a nearby freeway interchange.

With the railroad's existing facility south of Roth Road and west of Airport Way near capacity, it makes sense to expand, said Liisa Lawson Stark, Union Pacific director of public affairs.

"Really what we've seen is the domestic intermodal freight sector in North America has been identified as a major growth sector," she said Friday in a telephone interview from her Sacramento office.

The railroad is investing heavily as it looks to the future, another Union Pacific spokesman said.

"This Lathrop project is very much a signature project for us," said Aaron Hunt, Union Pacific director of corporate relations and media.

His company is spending $3.6 billion this year alone in capital maintenance and improvements, he said.

"All of that is meant to have us ready for growth as we hope to move out of the recession in the coming years," Hunt said.

And the benefits go beyond just the railroad, said Michael Ammann, president of the San Joaquin Partnership, who spoke in favor of the project at the commission meeting.

"It's a very important project," he said Friday from his Stockton office.

San Joaquin County already has tremendous transportation and logistics capabilities, with its inland seaport, major freeways, metropolitan airport and rail intermodal facilities. Expanding that capability can only enhance the region's economic development.

"More and more you hear the importance of logistics in the siting of manufacturing facilities," Ammann said. "We have positioned ourselves to transform our existing infrastructure into a super logistics center and that will attract manufacturing, distribution and jobs, basically."

A study of the rail expansion by the Business Forecasting Center at University of the Pacific, underwritten by Union Pacific as part of the environmental impact report, found it would result in $412 million in total output; generate $140 million in additional income; and create an additional $43 million in tax revenue.

Also, construction and related spending during the three years of the initial expansion will create an annual average of 387 jobs and $24 million of income in San Joaquin County.

Tom Pogue, assistant director of the Business Forecasting Center, said the project will also ease highway congestion and air pollution as more cargo moves by rail instead of less efficient trucks.

He also agreed that it could help attract new businesses interested in moving products and supplies through the intermodal facility.

"The important thing is to make sure we're taking advantage of this transportation and warehousing capacity," he said.

Glenn Gebhardt, Lathrop's director of community development and public works, said he has no argument with Union Pacific's project itself.

"The city absolutely does support the intermodal expansion," he said Friday.

However, the EIR falls short on plans to improve the Interstate 5/Roth Road interchange.

"We just happen to disagree on the percentage share and the cost of those interchange improvements," Gebhardt said. The gap is somewhere between $4 million and $5 million.

City officials had made no decision Friday on whether to appeal the planning commission's decision.